When Will Journalists Stop Treating Google As The Enemy?
from the let's-hope-it's-before-they-are-all-unemployed dept
Alex Klein sends over a speech by the former editor of the Baltimore Sun and LA Times, John Carroll. The speech, given at the University of Kentucky, perpetuates many of the misconceptions about the future of journalism that we have addressed repeatedly in the past. The most maddening, though, is the continued belief that search engines are a threat to traditional media (and therefore democracy):"Overnight, [Google, Yahoo, MSN and other "portals"] have become primary sources of news for millions. And overnight they have made billions of dollars. Rich as they are, though, the portals employ few reporters. Last I checked, the most successful of them, Google, had no reporters at all. Why originate news when news is free? The trend here is evident. The trend is that a tide of money is flowing decisively away from those who employ reporters and to those who don't. You don't need a degree in economics to see what this implies for journalism. And you don't need a degree in political science to see what it implies for democratic self-government."Now, I have a degree in neither economics nor political science, but what Mr. Carroll snidely presents as self-evident is patently misleading. Search engines are not the "primary sources of news for millions." As he notes, they do not even pretend to be competitors with newspapers. What search engines do for online news sources is send them absurdly high amounts readers. For free. The flow of news customers is not to Google; it is from Google to NYTimes.com, LATimes.com and the multitudes of other online news sources.
What Mr. Carroll is actually lamenting is the end of the monopoly era for news sources. Citizens now have more sources of news, and advertisers now have more platforms for reaching customers. As anyone who actually has a degree in economics will tell you, more competition is a good thing. And as anyone with a degree in political science will tell you, avoiding monopolistic news sources is good for democratic self-government. Of course, it still isn't clear how to fund some journalism, especially investigative work, but blaming Google isn't the answer. Instead, the newspaper industry needs to focus on the glimmers of success showing at Spot.Us, ProPublica and a host of other innovators.
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Filed Under: business models, journalism
Companies: google
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stating the obvious?
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I love the new era of News reporting
I don't want to live in a world where public opinion is whatever Fox or Sky News says it is! Do you?
Search engines on the Internet create a balance between independent and monopolized news sources so you can be the judge. I like that, and I want to keep it that way!
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Possibly both.
I doubt that University students would not be offended by this.
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Re:
Well, yeah...
But, what if he's ignorant that he's lying?
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stop linking
I vote for his paper.
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but...
But I think I understand what's behind the original comment that prompted the post.
It's a sense on the part of traditional journalists (I am one) that the search engines are taking the economic value out of what we do - that even though we're the ultimate destination, an advertiser will go to the gateway site first.
Before anyone thinks that I'm trying to recap the bottle, I'm a strong believer in breaking the traditional media's monopoly. But if you look at what various blogs and sites do well, it tends to be amplifying, analyzing or arguing with the original reporting, not replacing it.
I'm intrigued by some of the public service/not for profit experiments being attempted, but they're going to take a while, an d they may be dead ends.
In the meantime, the house of journalism is on fire, and we *still* need an answer to the very basic question - how does it get paid for?
best,
Scott Atkinson
News Director
WWNY TV
Watertown NY
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Re: but...
I do not think that advertisers go to the search engines solely because they are the gateway; after all, Google'e goal and policy is to move people through their site rapidly. People will be spending more time on the newspaper's site as they read the article.
Advertisers like search engines because, as Battelle pointed out in "The Search", searches demonstrate intent - something very valuable to advertisers.
But that still doesn't mean GOOG and NYT are competitors.
Kevin
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Re: Re: but...
Got it.
But remember, the one essential thing in the equation is the search. If I want to find out what President Obama is doing today, as a practical matter I'll use a Google search to aggregate all the content.
I then may or may not pick the NY Times, the WaPo or the whatever. So a correct value is being placed on the search, but the model starts to fall apart as soon as you get to the actual content.
Part of it, I suspect, is simple human nature. Buying lots of different news sources is hard, inefficient and expensive. Also, the people doing the buying have the model of 'what works;' in front of them - everyone uses Google. Not everyone goes to the White House or investigates FEMA, and the cost of that work is hidden from the consumer.
The frustrating thing about this is that I can see all sides in the argument, and it's hard to side with the 'pay for it' crowd. We've all been burned too many times by the repeated bad faith of media - SONY's rootkit exploit, the awful blu-ray copy protections, dvd region codes, iTunes license limits, etc., and most of us deeply suspect that media will try to make us buy an infinite number of copies of 'Dark Side of The Moon,' one for the house, one for jogging, one the car.
But on the other hand, I have small newsroom that produces some worthy content, and fewer clues about how to pay for it.
We're the simple 'breaking news, cover meetings, pay attention to local people' service. It's not glamorous at all, but for big parts of the rural area I serve, it's essential.
s.
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Re: but...
"that the search engines are taking the economic value out of what we do"
how? the value of "Free" does not equal "ZERO" value. It just means it could or should complement something else that can have a price.
"Before anyone thinks that I'm trying to recap the bottle, I'm a strong believer in breaking the traditional media's monopoly. But if you look at what various blogs and sites do well, it tends to be amplifying, analyzing or arguing with the original reporting, not replacing it."
What's wrong with questioning a news source?
"In the meantime, the house of journalism is on fire, and we *still* need an answer to the very basic question - how does it get paid for?"
Whatever the answer is, it isn't "Blame Google"
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Re: Re: but...
- First, there's absolutely nothing wrong with questioning a news source, and one of the good things going on right now is the substantial amount of questioning that takes place.
My only point was - the heavy lifting of original reporting is still done largely by traditional media organizations.
- I'm not trying to craft a simple 'blame Google' argument. What I'm trying to think out loud about is - Google is replacing some of the economic value that was formerly captured by traditional media.
I 'get' that the search itself is worth something. In fact, it's worth a lot. My point is - its value is easily revealed, because everyone uses Google. The backroom work - from slogging to city hall to look at tax records to keeping a correspondent in Iraq - is not so obvious, and isn't capturing enough money to keep going.
- As for your first point, it's similar to arguments Mike makes here - that you give away what is easy to give away and take, and make your money on the rarer parts of the product you make.
I'm have sympathy for that argument, but I don't think it's working that widely or well, even in the context where it's most often cited - the music business.
In journalism, I'm hard pressed to think of a good example - Naked News excepted - of giving away the 'infinite good' and charging for the scarcity.
Scott A.
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Re: Re: Re: but...
Hmm. I'd actually argue that it's the rule, rather than the exception. Naked News isn't a good example, actually, because they're really *not* charging for the scarcity. They're charging for the infinite good (the content).
Most newspapers already make their money from advertising -- which is selling a scarce good: the attention of their community. The infinite good (the content) should help build up that community, and the business model is selling the scarcity of their attention.
The problem is twofold: most news organizations aren't prepared to compete to retain people's attention, so they're losing it (hurting their greatest asset) and then secondly, they're doing a piss poor job of selling the attention. Google has done a great job of selling the attention by making ads *relevant*. News organizations need to come up with much better ways to deal with both of these issues.
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Wait a sec...
If you're saying that content is the bait that gets readers' attention, which is then sold to advertisers, that strikes me as unremarkable, and pretty much a description of the traditional model.
(It's also the description of any ad supported project, in which case 'scarcity' becomes a one size fits all concept.)
The only difference I see is that you have defined content (or, as you would likely say, the market has defined) as an infinite good.
That seems to be based on - it's a lot easier to copy than it used to be, and no one's willing to pay for it.
That still doesn't make it an infinite good - there is a real cost of production that has to amortized over a less than infinite number of copies. You either have to charge *something* for some of the copies, or you have to shift the cost to some pther product.
If your answer is advertising, and your argument is 'it still works, but old media sucks at it' then we haven't come very far.
I don't understand what you mean by "most news organizations aren't prepared to compete to retain people's attention, so they're losing it." Retain in what way? I'm not trying to be obtuse - I'm just not sure whether you're saying most news isn't interesting enough, or that news organizations need to be something else to retain peoples' attention or whether your point is something else entirely.
I think the point you make about how Google sells attention is important, and believe some aspects of the Google model will be (slowly, painfully) adopted by the old media over time.
This is a fascinating debate, and I want to throw down a thought for you. Maybe 'free' is not an eternal value - maybe the exact opposite will happen if one or two news organizations break in the direction of paid content, and there's an efficient mechanism for paying for that content.
I never, ever would have thought of paying directly for something as pedestrian as a mainstream newscast - but lately, I've thought I might pay something for, say, the CBS Evening News if it had fewer commercials and a little more content.
s.
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Re: Wait a sec...
If you're saying that content is the bait that gets readers' attention, which is then sold to advertisers, that strikes me as unremarkable, and pretty much a description of the traditional model.
Yes. You got it. I've said over and over again there's no "new economics" here. It's all just about better understanding old economics.
The only difference I see is that you have defined content (or, as you would likely say, the market has defined) as an infinite good.
No. No one "defines" an infinite good. It's a fact of nature. If the good can be copied at zero marginal cost, then it is an infinite, rather than a scarce good. It's a fundamental property of the good. It has nothing to do with definition.
That still doesn't make it an infinite good - there is a real cost of production that has to amortized over a less than infinite number of copies. You either have to charge *something* for some of the copies, or you have to shift the cost to some pther product.
PRODUCTION is a scarce good, but once it's produced, it's an infinite good.
That's why we think business models that charge for production of content often do make sense (hell, it's our business). But once that content is created, then it's an infinite good, and thinking you can charge for it is a dangerous business model.
And... amortization is an accounting issue, not an economic one. Mixing them up gets things confused.
But, yes, the idea is that you are shifting the costs to some other product. That's the whole idea behind these business models. You focus on charging for the scarcities and using the infinite goods to make those scarce goods more valuable. The more content you can use to attract a bigger/better audience, the more you can sell their attention for.
If your answer is advertising, and your argument is 'it still works, but old media sucks at it' then we haven't come very far.
Well, yes, and "no." When I talk about "selling the attention" of your community, I am talking about a very different form of "advertising." It's not about "advertising" at all, but about creating compelling content that advertises something:
http://www.techdirt.com/articles/20080318/004136567.shtml
So, I think once companies realize both of these things, they can start to put together business models that thrive.
I don't understand what you mean by "most news organizations aren't prepared to compete to retain people's attention, so they're losing it." Retain in what way? I'm not trying to be obtuse - I'm just not sure whether you're saying most news isn't interesting enough, or that news organizations need to be something else to retain peoples' attention or whether your point is something else entirely.
Traditionally, you could be pretty confident that a certain (large) percentage of people in a specific community would read the newspaper. It was, to some extent, a captive audience. That made it much easier to sell ads (bad ads...). That was the business model.
But today, the audience isn't captive. They have many choices for what they read and how they participate and interact with the news. So, that captive audience has dispersed somewhat... and those who remain find the bad advertising so irrelevant that it gets pushed down in value even more.
So, what news organizations should be doing is focusing on really providing *value* to communities so that they stick around, and then focus on selling that community's attention in ways that are *also* valuable to the community.
For example: here at Techdirt, we've built up an interesting community in part by giving them a voice, rather than just talking to them. And, then we built the Insight Community on top of that so that companies could *get insight back* from our community.
So, we have the attention of the community, but rather than just focusing on inundating them with bad ads (yes, we do have some, but it's small and decreasing) we focus on *connecting* them with companies in a way that all parties value the exchange -- even paying some members of the community for their insights.
This is a fascinating debate, and I want to throw down a thought for you. Maybe 'free' is not an eternal value - maybe the exact opposite will happen if one or two news organizations break in the direction of paid content, and there's an efficient mechanism for paying for that content.
I doubt that would have legs. The infinite nature of digital content means that, in a pure economic sense, the most efficient price in the market is $0. There are a number of reasons for this, but one of the important things to understand in recognizing efficient market theory is that an efficient market also provides the largest amount of opportunity.
So, the biggest overall opportunity to make money is actually when the price of the infinite good is zero, which boosts the value of a variety of other scarce goods. The job of a smart business these days is to figure out how to position themselves to capture as much of those scarce goods as possible. Some they won't be able to capture (externalities). But plenty of it they can capture, because they'll control many of the important scarcities made more valuable by the infinite goods (including, by the way, the reporters...).
I never, ever would have thought of paying directly for something as pedestrian as a mainstream newscast - but lately, I've thought I might pay something for, say, the CBS Evening News if it had fewer commercials and a little more content.
Which would just present an opportunity for someone else to create a better newscast for free, that is paid for in other ways... Which is why price always gets pushed to marginal cost in a competitive market.
Interesting discussion by the way!
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Couldn't agree more
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traffic vs. money
What's your experience with the money side of it? Has the increased traffic added money?
At my very, very tiny local level, that's where I've seen a disconnect. We get a very large number of visits, but haven't turned that into money, either directly or indirectly.
Scott A.
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Re: traffic vs. money
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push back of MSM against internet news sources
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Re: push back of MSM against internet news sources
What do you imagine a post-MSM era being like? Where's the news coming from and how are you getting it? Is it ever on tv or in a newspaper, or is it strictly on the web and devices? Is it vetted at all, or do you do the sorting for what to believe or not to believe, or is there crowd sorting of some sort?
Are you paying for it, or is it advertising supported?
best,
Scott A.
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Re: Re: push back of MSM against internet news sources
The idea that journalists MUST be paid for doing something a random guy can do for free/fun is just a grave digger.
The same goes for any media that can easily be shared online.
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Re: Re: Re: push back of MSM against internet news sources
The comment reminds me of arguments I had with friends a few years back, when I argued that the housing market and the economy in general weren't what they seemed, and they argued back that the underlying mechanism didn't matter and the market would settle the issue.
Markets aren't perfect, either as discoverers of information or as correcting mechanisms.
The underlying mechanism is ignored or treated as a black box at one's own peril.
"The idea that journalists MUST be paid for doing something a random guy can do for free/fun is just a grave digger."
And some journalists and journalism aren't paid for. But if you want it there consistently, along with, say, police officers, store clerks and the guy who digs your grave, you have to pay.
s.
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Re: Re: Re: Re: push back of MSM against internet news sources
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Re: Re: Re: Re: Re: push back of MSM against internet news sources
To call this a correction is like calling a tsunami a summer shower.
Of course, if you believe markets are perfect - that they are always moving toward equilibrium and correctly sorting information and risk, then I can see where you'd think this was a correction.
Next up: plague as a correction to population woes.
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GOOGLE
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A final thought for this leg of the conversation: I can't let go of the idea that what you see as a permanent and important shift in the economy - the move from scarcity to abundance in the digital realm, maybe to be followed by other realms - may be a temporary condition.
You're obviously right about the cost of reproducing something in the digital realm, after the initial investment is made.
But is that what drives 'free'?
In one of your posts, you write about the String Cheese Incident, and how the band makes money. As I read it, I thought "a band could only do this when the country is prosperous and there's cheap credit to be had."
Is it possible that the really important factor was - people had more money to spend, and that's what drove SCI to develop a creative way to get that money?
That giving away music as a 'loss leader' worked more because more people could afford to buy the higher priced products - that a sort of implicit substitution was underway?
And that the model stops working in a nasty recession, and the band will be forced to turn back to selling its core asset, the music?
As a heavy consumer of music, I think what happened over the last few years was the creation of a fragile *connoisseur class,* one in which Radiohead could backstop its experiment in free with a $100 cd/lp combination (I bought one) and Columbia could market "Kind of Blue" yet again by adding in a dvd, an lp and a fancy slipcase, (bought that one too)?
You could cite this as proof of your ideas, but isn't it possible that it's the result of lots and lots of money floating around, money that is no longer there
best,
s.
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Re:
I can't think of an example where an economy moved from a more efficient model to a less efficient one, so I really don't see how it's a "temporary" shift. Doing so would actually greatly hinder the economic recovery. Pricing infinite goods at zero expands the economy. Infinite goods are the root cause of economic growth (Paul Romer's research on this is really good, if you're looking to understand the economics).
Is it possible that the really important factor was - people had more money to spend, and that's what drove SCI to develop a creative way to get that money?
I don't think so at all. The whole point of using free to make other stuff more valuable is that it increases the size of your audience, so that more people can pay less (and some people can pay more). It makes very little sense to limit yourself in such an economy.
That giving away music as a 'loss leader' worked more because more people could afford to buy the higher priced products - that a sort of implicit substitution was underway?
Nope. I think you're thinking statically: i.e., that there is a set number of "fans" for a band. Thus if they are doing a loss leader model, some people are "subsidizing" the others. But you're missing out on the first half of the equation -- which is that the "free" part drives down pretty much every other cost and then increases (sometimes drastically) the market size. So you get smaller amounts of money from more people on some goods.
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one more thing...
But I just took a look at the SCI site, and they *sell* their music - the standard $10 for mp3s, a bit more for flacs. Did I misread your take on the band? I thought your argument was they give away the music, and make their money on other products and services.
s.
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one more thing...
But I just took a look at the SCI site, and they *sell* their music - the standard $10 for mp3s, a bit more for flacs. Did I misread your take on the band? I thought your argument was they give away the music, and make their money on other products and services.
s.
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one more thing...
But I just took a look at the SCI site, and they *sell* their music - the standard $10 for mp3s, a bit more for flacs. Did I misread your take on the band? I thought your argument was they give away the music, and make their money on other products and services.
s.
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one more thing...
But I just took a look at the SCI site, and they *sell* their music - the standard $10 for mp3s, a bit more for flacs. Did I misread your take on the band? I thought your argument was they give away the music, and make their money on other products and services.
s.
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one more thing...
But I just took a look at the SCI site, and they *sell* their music - the standard $10 for mp3s, a bit more for flacs. Did I misread your take on the band? I thought your argument was they give away the music, and make their money on other products and services.
s.
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When Will The Town Crier Stop Treating Journalists As The Enemy?
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ummm
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I think he's right
You don't need a degree in economics to see what this implies for journalism.
Yeah, you need a new business model.
And you don't need a degree in political science to see what it implies for democratic self-government.
Right - not much.
See? He's right!
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